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Supervalu Laying Off 1,100 Workers

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Having sold off its Albertsons, Jewel, Acme, and Shaws/Star Markets chains, as well as its SAV-ON and OSCO in-store pharmacy businesses to a Cerberus-led investor group earlier this month, slimmer grocer Supervalu (NYSE: SVU  ) finds itself less in need of a large back office than it once did. Accordingly, the company announced plans Tuesday to lay off approximately 1,100 employees at its corporate HQ and store support centers.

In a statement, Supervalue Chief Executive Officer Sam Duncan called the layoffs decision "difficult," but said it was necessary to begin "the rebuilding of our business" at its new smaller scale. As Duncan explained, a smaller Supervalu has "significantly fewer corporate and store support roles and functions" to fulfill, "making it important that the company restructure its operations and expenses accordingly."

Frontline store employees, Duncan clarified, will be largely unaffected by the announcement.

Supervalu noted that employees who are laid off "will be offered severance and outplacement services based on SUPERVALU’s eligibility guidelines." The company did not provide guidance on how much the downsizings might cost, or how they will affect short-term (or long-term) earnings. Shareholders, however, seem optimistic. Supervalu shares are up 1.6% in early trading, hovering around $5.13 per share.

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Rich Smith

I love things that go "boom." Sonic or otherwise, that means I tend to gravitate towards defense and aerospace stocks. But to tell the truth, over the course of a dozen years writing for The Motley Fool, I have covered -- and continue to cover -- everything from retailers to consumer goods stocks, and from tech to banks to insurers as well. Follow me on Twitter or Facebook for the most important developments in defense & aerospace news, and other great stories besides.

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Related Tickers

11/25/2015 4:02 PM
SVU $7.03 Down -0.09 -1.26%
Supervalu CAPS Rating: **